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MUMBAI: Indian policymakers should use the breathing space they've just been gifted to correct the fiscal deficit and fix an administrative regime that's been unable to get on with the building of ports and roads instead of drowning in investor euphoria over likely capital inflows after the Federal Reserve postponed tapering of the monetary stimulus on Wednesday night, Deutsche Bank Co-Chief Executive Officer Anshu Jain said.

"Whether it is this quarter or the next quarter, the reality is that bond buying will come to an end. It marks the end of an extraordinary expansion rather than a huge contraction," said Jain, head of the jury to select the winners of ET's Awards for Corporate Excellence, 2013.

Members of the ET Jury, who took part in a panel discussion, urged the government to hasten the dismantling of obstacles to economic activity as the market euphoria may be short-lived if the Fed begins tapering by December.

"We have tremendous challenges," said Frankfurt-based Jain. "I actually view the foreign exchange shock as may be a disadvantageous advantage. It has finally focused the attention on issues (referring to supply-side bottlenecks) which we have been talking (about) for two or three years. Never waste a good crisis."

Indian stocks, bonds and the rupee joined the global party in celebrating Federal Reserve Chairman Ben Bernanke's decision not to reduce his $85 billion a month of bond purchases.

The benchmark Sensex rose 3.43% to 20,646.64 and the rupee climbed 2.54% to 61.77 to the US dollar. Yield on 10-year government bonds fell 18 basis points to 8.19%. A basis point is 0.01 percentage point. Raghuram Rajan, who took over as RBI governor earlier this month, is scheduled to announce his first monetary policy on Friday.

"Probably the Indian market overreacted because of our current account deficit and other issues at the same time," Aditya Puri, CEO of HDFC Bank and a member of the ET Jury, said during the roundtable discussion. "It makes our life easier. But should it change our long-term thinking, and the structural adjustments we have to make? No."

"You should not plan the fortunes of a country like India based on the Fed announcement," said Harish Manwani, chief operating officer at Unilever Plc.

But the Fed's decision may present an opportunity for Rajan to partially reverse the interest rate tightening of the past three months aimed at staving off a currency collapse. Portfolio flows are expected to pick up after the Fed decision, which could cause the rupee to appreciate. Puri predicted that Rajan could reverse some of the monetary tightening measures announced in mid-July.

Asked what he thought should be Rajan's priorities in the monetary policy, Jain declined to get into specifics, but urged a continuing focus on controlling inflation and fiscal deficit. Finance minister had said the government was committed to containing fiscal deficit at 4.8% of GDP, down from 4.9% in 2012-13. WPI inflation came in at 6.1% for August, according to data released on September 16.

Economic growth has plunged to a decade low because of numerous policy hurdles such as land acquisition and so-called policy paralysis.

Growth for the year is expected to be below 5% as the industrial slump continues. High interest rates and the heavy indebtedness of Indian companies combined with the difficulty in obtaining clearances have led to investments coming to a grinding halt. Any recovery could thus be a long-drawn affair.

"We will see the end result as long as we get our governance right, and policy clarity, and address those aspects which have gotten our infrastructure industry into a rut," said KV Kamath, chairman, ICICI Bank, also a jury member. "Once we get them off the ground, we will be back where we ought to be."

Projects worth more than Rs 7 lakh crore are stuck because of lack of clearances from various government departments such as the environment ministry. Projects that could generate as much as 20,000 mw of electricity are lying idle as they are unable to get fuel — coal or natural gas — because of bureaucratic hurdles.

"It is possible that euphoria was overdone a few years ago as well," said Jain, referring to the widespread gloom about the Indian economy that prevailed prior to the uptick that began early September.

"As a very wise friend of mine says, India is never as good as it looks, and never as gloomy as it looks. The reality lies somewhere in the middle. It is a very complex, slow-moving process."